Correlation Between Generation Bio and XBiotech
Can any of the company-specific risk be diversified away by investing in both Generation Bio and XBiotech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Generation Bio and XBiotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Bio Co and XBiotech, you can compare the effects of market volatilities on Generation Bio and XBiotech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Generation Bio with a short position of XBiotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and XBiotech.
Diversification Opportunities for Generation Bio and XBiotech
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Generation and XBiotech is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech and Generation Bio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Generation Bio Co are associated (or correlated) with XBiotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBiotech has no effect on the direction of Generation Bio i.e., Generation Bio and XBiotech go up and down completely randomly.
Pair Corralation between Generation Bio and XBiotech
Given the investment horizon of 90 days Generation Bio Co is expected to under-perform the XBiotech. In addition to that, Generation Bio is 1.31 times more volatile than XBiotech. It trades about -0.55 of its total potential returns per unit of risk. XBiotech is currently generating about -0.12 per unit of volatility. If you would invest 730.00 in XBiotech on September 12, 2024 and sell it today you would lose (67.00) from holding XBiotech or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Generation Bio Co vs. XBiotech
Performance |
| Timeline |
| Generation Bio |
| XBiotech |
Generation Bio and XBiotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Bio and XBiotech
The main advantage of trading using opposite Generation Bio and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, XBiotech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XBiotech will offset losses from the drop in XBiotech's long position.| Generation Bio vs. Monte Rosa Therapeutics | Generation Bio vs. Nkarta Inc | Generation Bio vs. Lyell Immunopharma | Generation Bio vs. Sana Biotechnology |
| XBiotech vs. Equillium | XBiotech vs. DiaMedica Therapeutics | XBiotech vs. Valneva SE ADR | XBiotech vs. Vivani Medical |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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